Humbug watch: Lord Levene on “fair pay”
Lord Levene, chairman of Lloyds of London, the insurance market that offers a berth for those who fluff their job interviews at the City investment banks, offered the following sage remarks about pay to the British Bankers’ Association dinner on Monday 29th June:
At Lloyd’s we held a conference a few months back in New York discussing the origins of world wide risk and, in particular, the current problems of the banking industry. Speaking at the conference was one of the most successful and best known investment bankers in New York. One remark he made sticks very much in my memory. He said that when he got his first job on leaving business school at a New York investment bank, he was paid $30,000 per year. At that time, the CEO of the bank was paid $300,000 a year. He thought that that was a sensible multiple. Perhaps we might reflect on the highest paid individuals in some of our institutions and ask whether they are paid more than 10 times the amount of a new joiner. I would leave that thought with you.
Fine words. One can imagine the looks on the faces of the City grandees in attendance as they digested this thought with their Sylphides à la Crème d’Écrevisses. But do they butter many parsnips, as the saying goes. Let’s see how Levene measures up by this rough and ready standard. According to the Lloyds website, a graduates’ starting salary is £26,000 a year. Levene’s remuneration in 2008: £806,000. Levene/graduate multiple: 31 times.
Humbug rating: five humbugs.